Do you need $1M to retire?

How much do you need to retire? Or is the question, how much money do you *THINK* you need to retire? Well, according to the Retirement Confidence Survey from the Employee Benefit Research Institute, 37% of workers believe they need $1 million or more.

The figure “$1 million” is a popular number. It’s nicely rounded. It’s what Dr. Evil asked for in Austin Powers as random. But is it realistic?

Well, using the 4% rule as a guide, $1 million would imply annual spending of $40,000. Now, $40,000 a year isn’t too shabby. According to industry data, the average annual cost of living for a single adult in the U.S. is $28,458. On the flip side, using the 4% rule on $28,458 results in a retirement nest egg of $711,450. So, on average, a single person living in the U.S. would do fine on $711K of retirement funds.

At the end of the day, the actual amount you need in retirement has to do with your spending habits. There is no right number.

What do you think fellow readers? Is $1M enough for you? Do you have a number? Feel free to discuss below.